Again, I’d like to draw your attention to a piece in the NY Times. I’m not sure why the media and bloggers seem to get it and the policy makers don’t. I guess history will show who had clear vision and who had their head in the sand or elsewhere.
And to further illustrate the point and provide a VERY clear picture of what is very likely coming at us here is a snippet from a story in today’s NY Times on what austerity measures have done to Ireland.
Nearly two years ago, an economic collapse forced Ireland to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.
Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession.
Joblessness in this country of 4.5 million is above 13 percent, and the ranks of the long-term unemployed — those out of work for a year or more — have more than doubled, to 5.3 percent.
I would think that a look at Ireland would at least cause people to wonder if cutting spending at the very beginning of a fragile (and uneven) recovery is the right thing to do.